A small Kentucky town is about to join a rather unfortunate club by becoming one of the few municipalities to file for bankruptcy protection.
According to a Bloomberg report, Hillview, Kentucky, filed for bankruptcy this week, becoming the first municipality to file for bankruptcy since Detroit famously did in 2013.
From the Bloomberg report:
Hillview, which faced legal damages it couldn’t afford, is only the third Chapter 9 filing this year, following an Oklahoma hospital and a special district in California.
According to the Bloomberg report, the issue that caused the town of 8,000 to declare bankruptcy was contract dispute with a local company, Truck America Training, over a land sale.
Again, from Bloomberg:
In February, Standard & Poor’s lowered its rating to junk after the city unsuccessfully appealed a court ruling ordering it to pay $11.4 million in damages to the company.
Hillview estimated its liabilities as high as $100 million and assets as high as $10 million, according to the filing in U.S. Bankruptcy Court in Louisville. Truck America is the city’s largest unsecured creditor.